President Trump is scheduled to announce the first negotiated trade deal in the global trade reset with the United States.  The deal is between the U.K and the USA, which is interesting as a UK free trade agreement was being worked on at the time COVID-19 hit in 2020.

Back in 2019 President Trump and then Commerce Secretary Wilbur Ross were working two strategic trade negotiations at the same time that never materialized. The first was an FTA with the U.K and the second was with the EU.  The nuance of the U.K deal was favorable and structurally aligned to create leverage against the EU negotiations. It will be interesting to see how this one is structured.

From President Trump this morning on Truth Social: “The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come. Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!”

UPDATE: VIDEO ADDED

(more…)

I have watched it so many times and each time I have to pause it to stop laughing.  When you consider everything in the lead up to this event, this really is the best press availability ever.

At 29:37 of the video below, President Trump is asked:

MEDIA: “Is there anything the Prime Minister can say to you today to change your mind on tariffing Canada?” … “Is there anything he can say to you, in the course of your meeting today, that could get you to lift tariffs on Canada?”

TRUMP: “No.”

MEDIA: “Why not?”

TRUMP: “Just the way it is.”

.

The last five minutes are so funny, so brutally honest, so genuinely instructive of the baseline from which all of the future trade aspects will take place, that it just makes you laugh at the simplicity of the problem that Canada faces. “We don’t really want cars from Canada,” in reality we don’t want anything from Canada…  lolol.

“Look, this is all friendly.” Carney is just sitting there, like a doofus.

Best President Ever!

(more…)

I don’t want to say ‘I toldya so’, but….  Listen carefully to the answer to the first question at (05:00 minute mark) as President Trump responds to the question about the USMCA with Canadian Prime Minister Mark Carney next to him.  The USMCA is “effective, and it’s still effective, but people have to follow it,” inferring the issues of Canada as a tool to avoid China tariffs, President Trump said.

Then comes the part everyone will overlook as President Trump notes, “as you know it terminates fairly shortly. It gets renegotiated fairly shortly.” Then comes the biggest statement, “this was a transitional deal, and we’ll see what happens, we’re going to start renegotiating that”… “I don’t know if it serves a purpose anymore.”  …. “And the biggest purpose it served was, we got rid of NAFTA.”  This presents the future of the USMCA and specifically the U.S-Canada aspect to the trade deal exactly as we anticipated.

President Trump is going to exit the trilateral USMCA in favor of two distinctly different bilateral trade agreements between the U.S and Mexico; and the U.S and Canada.  The only consideration now is the timing.  President Trump is 100% focused on the BIG ECONOMIC PICTURE; it’s not about the politics, it’s all about the economics. [Also pay attention to USTR Jamieson Greer]  WATCH:

.

Prime Minister Mark Carney knows what is coming. His response about stepping up their military spending to meet NATO obligations is part of that dynamic.

The 51st state remarks were all about getting Canada into a position where Trump is about to open up two distinctly different bilateral trade agreements.  The relationship that Canada has with China is a major risk to Carney’s position.  Canada doesn’t stand a chance.  In essence, at the end of this journey of economics North American trade is going to be entirely different.

(more…)

In a decision to position for long-term tariff avoidance, Mercedes Benz will shift production of their GLC (compact SUV) to Tuscaloosa, Alabama, away from Bremen, Germany.

Previously, the German automaker had shifted manufacturing of large SUV lines to the USA to avoid the pre-existing 25% ‘chicken tax.’  However, the smaller and less expensive crossover types were still made in Germany and shipped to the USA.  As the shipping vessels returned to Germany, they would take some of the SUV inventory back with them.  It was the most cost-effective solution, given the nature of the tariff situation.

Now, with larger import tariffs against all vehicles, Mercedes has shifted their business model to essentially an outcome where all USA marketed/sold vehicles will be manufactured in the USA, and all EU marketed/sold vehicles will be manufactured in Germany.

(Via Daily Mail) – Mercedes-Benz will shift production of one of its vehicles to Tuscaloosa, Alabama by 2027. The German luxury carmaker’s move is the latest response from an industry caught in the expensive crosshairs of President Donald Trump’s 25 percent tariffs.

The decision marks a potential win for Trump’s protectionist trade agenda, which aims to boost US manufacturing by slapping steep tariffs on foreign-made goods. But there are many complicating factors.

(more…)

In this interview, British pundit Neil Oliver and Canadian David Krayden discuss how in the wake of the recent election Alberta separatism is gaining momentum.  Elected Prime Minister Mark Carney’s net zero energy policies could push Canada towards economic crisis, with fears of higher taxes and a loss of national identity.

Krayden outlines why some Canadians believe Alberta could become the 51st US state and how Donald Trump’s surprising support for Carney is fueling debate in Candian conservative circles.  Was there a plan behind Trump’s approach?   WATCH:

.

(more…)

As if on cue, a short article from the Chamber of Shipping notes that cargo from China is being rerouted to avoid tariffs.

The destination of the cargo is, wait for it,… CANADA!

USCoS – As U.S. tariffs on Chinese goods soar to as high as 145%, a growing number of companies are rerouting shipments to Canada and storing them in bonded warehouses in hopes of avoiding the duties and capitalising on a future rollback. This strategy has caused a sharp spike in Chinese shipments to Canada, with logistics firms and customs brokers reporting surging inquiries and storage demand from consumer goods, chemical, and auto parts sectors. However, experts caution that prolonged storage costs—estimated at $1,750 per container per week—and limited warehouse capacity could force sellers to offload discounted goods into the Canadian market, potentially disrupting domestic manufacturing. Others warn the strategy is risky and unsustainable, especially if the trade conflict drags into next year’s U.S.-Mexico-Canada Agreement negotiations. (link)

This will not end well….

… For Canada.

(more…)

According to the people present, when former Canadian Prime Minister Justin Trudeau traveled to Mar-a-Lago to meet with President-elect Donald Trump, his primary objective was to inform President Trump his public demands for U.S. trade reciprocity with Canada were unachievable.

Trudeau was not lying.  In this outline we will explain a dynamic that is certain to surface this summer.

President Trump has deferred all North American trade negotiations with Canada and Mexico until later in the year, after the priority trade deals with other large trade partners are completed.  The USMCA trade pact is due for review and renegotiation this year [BACK STORY]. We should expect an entirely different trade pact as an outcome, quite possibly the ending of the trilateral nature of the current agreement.

A few days ago, Politico noted that Canadian Prime Minister Mark Carney had a reprieve from his prior campaign points about confronting President Trump on tariffs immediately.  PM Carney is currently trying to align allies for what will likely be a major confrontation that he cannot win.

♦ BACKGROUND – Following the 2024 presidential election, Prime Minister Justin Trudeau traveled to Mar-a-Lago and said if President Trump was to make the Canadian government face reciprocal tariffs, open the USMCA trade agreements to force reciprocity, and/or balance economic relations on non-tariff issues, then Canada would collapse upon itself economically and cease to exist.  In essence, in addition to the NATO defense shortfall, Canada cannot survive as a free and independent north American nation, without receiving all the one-way benefits from the U.S. economy.

To wit, President Trump then said, if Canada cannot survive in a balanced rules environment, including putting together their own military and defenses and meeting their NATO obligations, then Canada should become the 51st U.S state.  It was following this meeting that President Trump started emphasizing this point and shocking everyone in the process.  However, in the emotional reaction to Trump’s statements, no-one looked at the core issues outlined by Trudeau that framed President Trump’s opinion.

(more…)

The Bureau of Labor and Statistics (BLS) has released the jobs and employment data for April [SEE HERE].  Within the data we see 177,000 jobs were gained, beating expectations of 133,000.   The unemployment rate remains unchanged at 4.2%.

Federal government employment declined by 9,000 in April [BLS, Table B-1]  Health care added 51,000 jobs: consisting of hospitals (+22,000) and ambulatory health care services (+21,000). Transportation and warehousing increased by 29,000 jobs in April: with warehousing and storage (+10,000), couriers and messengers (+8,000), and air transportation (+3,000).

.@StephenMoore reacts to the jobs report: “436,000 increase in the number of people who are employed. So, this is an amazing report… The labor force participation rate rose. So, this is a very strong number.” pic.twitter.com/CuAPwD52Yn

— Rapid Response 47 (@RapidResponse47) May 2, 2025

(Via Wall Street Journal) – The U.S. economy continued to add jobs at a steady clip in April, although the pace of gains slowed slightly during a month that saw changing tariff announcements and market turmoil.

The U.S. added 177,000 jobs in April, the Labor Department reported Friday, above the gain of 133,000 jobs economists polled by The Wall Street Journal had expected to see.

(more…)

This next story is a natural outcome in the flow of goods. Remember, the Bureau of Economic Analysis (BEA) of the first quarter is a hindsight review. Meaning the information released today was based on activity in January, February and March 2025.

U.S. companies surged the purchasing of import goods, mostly from China, by more than 50% in the first quarter. They were/are building inventory. So, what happens in China starting in April?

Hong Kong, CNN – China’s factory activity contracted at its fastest pace in 16 months in April, as steep US tariffs took a heavy toll on the manufacturing sector, adding urgency to Beijing’s efforts to roll out fresh economic stimulus.

The manufacturing Purchasing Managers’ Index (PMI) fell to 49.0 in April, the weakest reading since December 2023, according to data released by the National Bureau of Statistics (NBS) on Wednesday. A reading below 50 signals a contraction.

Zhao Qinghe, a senior statistician at the NBS, said in a statement that the contraction in factory activity was due to “sharp changes in the external environment and other factors.” (read more)

The U.S. has front-loaded the inventory. So, orders to China drop now. It’s a natural outcome.

We have purchased goods in advance. So, orders to China drop. As a result, the cargo shipments from China to the USA drop in April, May and June.

(more…)

As we saw previously in Term-1, President Trump has again divided and assigned trade negotiation responsibility to key cabinet members.  In this interview with CNN National Economic Council Director Kevin Hassett smiles and walks effortlessly through the narrative engineering attempt by CNN pundit Kassie Hunt.

This is a must watch interview if you are following the details of the current global trade renegotiation.

Hassett outlines the current status of trade negotiations with some of the biggest trade partners in the world.  India and Southeast Asia are being handled by Treasury Secretary Scott Bessent.  Commerce Secretary Howard Lutnick is in control of the section 232 (national security) tariffs, and USTR Jamison Greer has 19 current Free Trade Agreements outlined with various partners all willing to accept the reciprocity agreement.  WATCH:

.

(more…)